A recent study shows that organisations are throwing money away through poor data management and alienating their customers in the process. 96% of organisations around the world recognise that inaccurate data has a direct financial impact on their operations, costing on average 19% of revenue or funding, but many fail to manage their data effectively.
The report, issued by global information services company Experian and titled “Contact data: the profit maker or neglected asset?, commissioned by Experian’s specialist data integrity business, QAS” surveyed 2,078 organisations worldwide and highlighted that poor data quality is reducing revenue, alienating consumers and leaving organisations vulnerable to the penalties of non-compliance.
Customer attrition, database regulation, data security and marketing spend all contribute to the financial welfare of organisations. And all of these are directly linked to data accuracy. Despite an overwhelming awareness of the cost and implications of poorly managed data, only 54 percent of organisations have a documented strategy to keep their contact data accurate and up-to-date. This is even worse for UK organisations, with only 42 percent able to confirm that a strategy exists.
“Never before has the management of contact data been more critical,” said Jonathan Hulford-Funnell, Chief Operating Officer, QAS.
“Each year in the UK, 12 per cent of adults change their address, over 50,000 people change their name and over 500,000 pass away. Also, the number of people signing up to the Mailing Preference Services to opt out of unwanted marketing communications has quadrupled since 2002. A documented contact data management strategy provides an essential framework, so that organisations can responsibly manage the data they hold on individuals.”
According to Experian, the report makes most worrying reading for the retail and financial services sectors. 61 % of retail and 51% of financial services organisations around the world don’t have, or don’t know if they have a documented data quality strategy. Utilities and telecoms lead the way, with over half of organisations (53%) reporting that they have a data quality strategy in place. However, a worrying trend that remains across all sectors is that organisations are suffering from a fragmented approach towards data quality. Only 37% have a documented data quality strategy that includes all departments.
In comparison, QAS research among 1,500 UK consumers in 2006 found that nearly half (48%) believe it is an organisation’s responsibility to update personal information when an individual moves house. 43 per cent of people that receive mail for a previous occupant feel the sending organisation is ‘impersonal’ and ‘out of touch’. Similarly, 55 per cent say it’s the organisation's responsibility to update its database when a person dies and 40 per cent would go out of their way to avoid doing business with a firm that continued to send mail addressed to a deceased relative.
The global research also looked at compliance. Only 27 per cent of organisations claim to be fully compliant with database-related regulations. This has gone backwards since similar research was conducted in 2005 when 37 percent believed they were operating within industry regulations. UK organisations are faring the best and say that they are 87 percent compliant with database regulations, followed closely by North America. The least compliant territory is The Netherlands (73 per cent). Globally, organisations in the financial services are the most compliant, claiming on average 87 per cent database compliance. The least compliant sector is manufacturing at 76 per cent.
For the first time, the research looked at how much data is validated upon collection. Only eight per cent of organisations validate all of the information they collect and 34 per cent do not validate any of the information that enters their systems. Address and postcode are the only contact elements that are validated by more than half of the organisations (61 per cent). Only 47 per cent of organisations have measurable targets for data accuracy, completeness and degree to which contact records are up to date.
“For data management to get the recognition it deserves, companies must take an enterprise-wide approach that is related to business goals,” concluded Jonathan Hulford-Funnell.
“Measurable targets must be set so you can track performance, identify gaps and make recommendations and investment in the right areas. It is also time for all organisations to take their data protection obligations seriously.” |
